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03Jun 2016

The Geek's Reading List: June 3

Posted By: Brian Piccioni

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Comments: 1

The Geek's Reading List is a weekly publication written by Valitas advisor, Brian Piccioni. Brian has been part of the technology industry for a third of a century now. He has been a sell-side research analyst for the past 20 years, where he was ranked the #1 tech analyst in Canada for six consecutive years, named one of the best tech analysts in the world, and won a number of awards for stock-picking and estimating. The Geek's Reading List looks at recent developments in the technology sector by discussing articles that Brian compiled over the week. In his own words, the discussions are usually provocative, new, and counter-consensus. The sorts of things not being written anywhere else.

Needless to say, Oracle’s attempt to shake down Google for $9B was not entirely a charitable endeavour rather than a cynical effort to appear relevant. The idea that APIs are somehow copyrightable is absurd on its face so the claim this lawyer makes that breaking that copyright is somehow bad is ludicrous.

“While we don’t know what ultimately swayed the jury, Google’s narrative boiled down to this: because the Java APIs have been open, any use of them was justified and all licensing restrictions should be disregarded. In other words, if you offer your software on an open and free basis, any use is fair use. If that narrative becomes the law of the land, you can kiss GPL (general public license) goodbye. No business trying to commercialize software with any element of open software can afford to ignore this verdict. Dual licensing models are very common and have long depended upon a delicate balance between free use and commercial use. Royalties from licensed commercial exploitation fuel continued development and innovation of an open and free option. The balance depends upon adherence to the license restrictions in the open and free option. This jury’s verdict suggests that such restrictions are now meaningless, since disregarding them is simply a matter of claiming “fair use.””

2) Samsung Mass Producing Industry’s First 512-Gigabyte NVMe SSD in a Single BGA Package for More Flexibility in Computing Device Design

If anybody has any doubt that HDDs are on their way out, this announcement is worth a look: a 512GB Solid State Drive in a single package about the size of a postage stamp. It should be faster, more power efficient and more reliable than any other SSD on the market to boot. Unfortunately, pricing hasn’t been announced and you can bet it is high, at least on a price/GB basis. Nonetheless you are looking at the future, or lack thereof, of the HDD industry.

“Configuring the PM971-NVMe SSD in a single BGA package was enabled by combining 16 of Samsung’s 48-layer 256-gigabit (Gb) V-NAND flash chips, one 20-nanometer 4Gb LPDDR4 mobile DRAM chip and a high-performance Samsung controller. The new SSD is 20mm x 16mm x 1.5mm and weighs only about one gram (an American dime by comparison weighs 2.3 grams). The single-package SSD’s volume is approximately a hundredth of a 2.5” SSD or HDD, and its surface area is about a fifth of an M.2 SSD, allowing much more design flexibility for computing device manufacturers.”

I can only imagine what it must be like to work for a real car company like Toyota of Volvo: you produce large quantities of reliable vehicles using highly automated production techniques and you read this article quoting Musk, who manufactures a miniscule number of poor quality and unreliable vehicles, and how he is somehow going to “revolutionize” factories. It’s got to make you crazy.

“Having already upset the traditional automobile industry with his electric cars and the space exploration business with his reusable Space X rockets, Tesla Motors Chief Executive Elon Musk will now set about trying to revolutionize the American factory. In a freewheeling talk before shareholders Tuesday, Musk said he and his Tesla team will completely rethink the factory process, hoping to bring “factors of 10 or even 100 times” in improvements in efficiency to the manner in which “you build the machines that build the machine.” Musk, returning repeatedly to the idea of “physics-first principles,” said he no longer uses an office at Tesla, but spends all of his time on the production line.”

This may be a very significant development in the smartphone industry. Xiaomi has been very successful in the developing world where it has been able to operate without worrying about patent suits (most likely from the incredibly litigious Apple). Patents are a two way street and involve a “sue me and I’ll sue you” type dynamic. The only reason Xiaomi would be interested in Microsoft’s patents would be because it wants to sell into the US and EU.

“Smartphone maker Xiaomi has bought the rights to hundreds of Microsoft’s smartphone inventions. Experts say the patent deal paves the way for the Chinese firm to sell its handsets in Western markets. Microsoft will benefit from the fact that some of its Android apps – including Office and Skype – will now be pre-installed on Xiaomi devices. The announcement comes at a time when Xiaomi has been struggling to meet sales targets. The Beijing-based company originally set itself a target of selling 100 million smartphones in 2015. But it managed to sell only 71 million, partly because of increased competition from domestic rivals.”

I am loath to cite Mary Meeker in anything but what the heck – it’s a slow week. This is one of two items about smartphone sales which I predict are going to grow very modestly or even contract over the next few years. Key is pricing: it is coming down due to a number of factors but slow growth is certainly one of them. Slow or negative unit growth amid declining unit prices suggests a tough slog ahead for the industry.

“Due to Apple’s introduction of the lower-cost iPhone SE — and the cheaper price tag of smartphones in the company’s expanding global markets — Meeker also expects Apple’s average selling price per unit to dip this year for the first time since 2012. In that year, ASP dropped only 4 percent (from $712 in 2011 to $686 in 2012), but now the company is predicted to see a 9 percent decline in ASP (dropping off from $717 in 2015 to $651 in 2016). Unlike in years past, global smartphone unit shipments are slowing “dramatically,” for both Apple and Android-supported devices. Expansion for the smartphone market as a whole has stagnated, going from a peak in 2010 at nearly 80 percent year-over-year growth, to just about 15 percent in 2015.”

I have never found that IDC, Gartner, etc., are any better at predicting the future than a blind monkey would be. Nevertheless, this is one case where they are probably correct, though admittedly they are simply arriving at a conclusion which should have been obvious a year ago. What I don’t understand is how they get to 1.84 billion smartphones by 2020, which works out to a 5.5% compound growth rate. Why should sales accelerate?

“In 2014, smartphone shipments grew a massive 27.8-percent, and the next year, 2015, smartphone shipments grew by 10.5-percent. The International Data Corporation (IDC) expects that we’ll see a substantial slowdown in shipments this year, with 2016 (possibly) ending up at around only 3.1-percent. According to IDC’s Worldwide Quarterly Mobile Phone Tracker, this year will probably see about 1.48 billion smartphone shipments, a number that is estimated to climb to 1.84 billion by 2020.”

Last week I carried an item about a ZTE flagship phone expected to sell for about $450. This week Asus, which is better known to most consumers, announced a $499 flagship which appears to be significantly better, at least specification-wise to the latest iPhones. If phones with these features are selling for less than $500 (expect discounting) you can imagine what a more pedestrian smartphone will sell for.

“The company’s most impressive looking flagship to date, the Asus ZenFone 3 Deluxe overpowers the ZenFone 3 and large-screened ZenFone 3 Ultra phones it was announced alongside at Computex in Taipei. It looks like it has the chops to match up with other flagship phones in the market, too. Sporting a monster 6GB of RAM, the base 64GB model will cost $499 (£340, AU$695). The competitively priced phone will be available in Q3, sometime after July.”

I actually agree – adblock whitelisting is a racket, but that’s not why I use uBlock – which doesn’t yet have a paid whitelist feature) – I block everything. You’d think the newspaper industry would be OK with the idea of paid whitelisting because, well, according to the law money is speech and, let’s face it, they aren’t charities. I have no idea how the case will go, except that if Adblock Plus loses, more people will switch to any of the numerous other alternatives.

“Shortly before the Memorial Day weekend, the Newspaper Association of America filed a Complaint and Request for Investigation to the Federal Trade Commission regarding the ‘unfair and deceptive trade practices’ of Eyeo’s paid whitelisting for the AdBlock product. The complaint [PDF], which represents the likes of The Washington Post along with 2000 other news outlets, describes adblocking technologies as ‘free-riding’ and a ‘clear and present danger’ to a ‘vibrant, content-filled Internet’. However consumer opinions might be in contrast to that view of network-delivered ads, the complaint’s central contention is that adblocking technologies in general – and AdBlock Plus in particular – are cynically using popular take-up to generate an entirely new business model based on ‘middling’ – effectively running a protection racket wherein cash-rich publishing entities must pay to get their network ad content seen by default for the adblocking end-user.”

It’s almost as though consumers would prefer not to be inundated with distracting, bandwidth consumer, malware carrying, and outright fraudulent ads. Go figure. I find it interesting mobile ad blocking is more common in India and Indonesia but it might be a rare occasion where the developing world leads in technology. Mobile carriers are getting into the act (see item 10) but I suspect that is because they want to ransom advertisers to get them whitelisted.

“Already, 36 percent of the smartphone users in the Asia-Pacific region have so-called ad-blocking browsers on their mobile devices, allowing them to remove online ads when they use the Internet. In India and Indonesia — two of the world’s fastest-growing Internet markets — that figure is almost two-thirds of smartphone users, according to the report. “We found the results surprising because in the West we don’t often consider what’s going on in developing countries,” said Sean Blanchfield, chief executive of PageFair. “It’s only a matter of time until mobile ad blocking comes to the West.””

I figure this is simply a test by carriers to get advertisers to pay for the privilege of carrying their ads, so it is most likely a dry run for what amounts to the “paid whitelist” scam.

“Three wants to change the way targeted ads are created. While the company seems to be fine with relevant ads, Three is taking a stance against the type of marketing materials that are customized based on information surreptitiously collected from users. Along with striking back against advertisers and publishers of targeted marketing materials, Three is also working to shift, from consumers, the burden of paying for ads using data as currency. “The current ad model is broken,” says Malleschitz. “It frustrates customers, eats up their data allowance and can jeopardize their privacy. Something needs to change.””

Hardly a day goes by where I don’t see an article about how robots are gonna take our jerbs. Most such articles are written by economists and non-experts who know nothing about robotics and AI but that doesn’t seem to hurt their influence. This article has a more reasoned look at the situation which has been unfolding since the dawn of the industrial revolution and which has always led to improved standards of living for all.

“The robots are coming — but not in numbers that would imperil most Americans’ jobs. Few subjects have inspired as much hype as robots. Consider some sample headlines: “Robots and Computers Could Take Half Our Jobs Within the Next 20 years,” “Robots Could Put Humans Out of Work by 2045,” “Why the Highest-Paid Doctors Are the Most Vulnerable to Automation.” Here’s why you should be skeptical, at least in the near term. First, there’s little evidence that robots have yet had much effect on job creation in the current recovery. Since a low point of payroll jobs in February 2010, the economy has added 14 million jobs. These figures surely obscure countless thousands of jobs lost to automation, but that’s a normal part of a dynamic economy.”

I guess if you have halfwits who decide to fly their model airplanes near airports you need countermeasures to destroy those model airplanes. What the article does not make clear is what happens to the drones after control is lost: loss of control doesn’t mean it drops from the sky.

“The Federal Aviation Administration (FAA) is expanding efforts to source technology that can detect small, unmanned aerial vehicles near airports. Three British companies developed the Anti-UAV Defence System (Auds), due to be included in new trials. It works by jamming signals to drones, making them unresponsive. A thermal imaging camera allows the Auds operator to target the unwanted drone before signal jamming, via a high-powered radio signal, is activated.”

I don’t agree with the conclusions of the article but I figure in fairness I’d include it. To begin with the “GPUs are going to revolutionize computing” narrative has been around as long as stock promoting GPU executives have been around to promote them. There is nothing magical about the GPU architecture and it has applicability in certain domains. In the unlikely event Single Instruction Multiple Data (SIMD) becomes a big deal then Intel will simply adapt its processor architecture to including more SIMD instructions. If, indeed, database SIMD becomes a big deal they’ll just tuck in database centric SIMD instructions. No biggy.

“Having made the improbable jump from the game console to the supercomputer, GPUs are now invading the datacenter. This movement is led by Google, Facebook, Amazon, Microsoft, Tesla, Baidu and others who have quietly but rapidly shifted their hardware philosophy over the past twelve months. Each of these companies have significantly upgraded their investment in GPU hardware and in doing so have put legacy CPU infrastructure on notice. The driver of this change has been deep learning and machine intelligence, but the movement continues to downstream into more and more enterprise-grade applications – led in part by the explosion of data.”

I don’t know if I’ve ever heard of a database implementation going well – unless you consider “less of a disaster than expected” as going well. Target came off as Keystone cops in this escapade and deservedly so as they elected to go with the highest risk option. Still, you have to consider the consultants at least partly to blame: after all, having screwed up so many implementations in the past you’d think they would have figured it out by now.

“In the U.S. Target Stores had used a combination of custom and standard technology that had been fine-tuned over the years to meet its operational requirements and there was a great deal of knowledge around how these systems worked. Target Canada faced a choice: Adopt the US technology or implement something completely new. You cannot help feeling that Target Canada was to be the guinea pig or proving ground for SAP in the US. According to the article, apparently the technology in use in the US was not geared up to deal Canada. Adoption would have required customization for the Canadian dollar and French-language characters. Those changes would take time and time was not a plentiful commodity in the roll-out plan. The decision was made to go with SAP. On face value that decision seems to have made sense – after-all, SAP is popular in retail and has a global reputation.”

I first heard of this within the context of Lenovo, a company which has on more than one occasion shipped malware to its customers. In this case, the company is just one of a group of major vendors who shipped vulnerable software one their PCs. What is interesting is that some of the vendors simply ignored the report.

“The research was conducted between October 2015 and April 2016, and Duo Security informed each manufacturer as soon as they spotted each vulnerability. However, while some of the laptop vendors responded to the threat immediately, others did not and some have still not even patched the vulnerabilities. “Asus and Acer were the worst. With Asus, there were two different vulnerabilities. This one had code execution that was quite obvious and easy to exploit – it literally took less than 10 minutes to attack the system using that vulnerability,” said Manzuik. “They have told us they are patching the issue, but we have still not seen a patch from it. They originally did make a patch, but then they didn’t release it. We told them about the bugs over three months ago.” Duo Security praised Lenovo and HP for taking the risks seriously and having a process in place for researchers to report such issues. In fact, Lenovo has decided to completely remove the offending updater software from its laptops.”

16) Wal-Mart says it is 6-9 months from using drones to check warehouse inventory

Drones have a lot of limitations and can be pretty dangerous but there are viable applications for them. This may be one of them: the idea seems to be that you fly around and record video of your inventory. Presumably some poorly paid human (though they might use image recognition) then reviews the video and counts up the stuff on the shelf. Since you aren’t paying people to walk around and do the same thing, it could be a big cost saver.

“Wal-Mart Stores Inc said Thursday it was six to nine months from beginning to use drones to check warehouse inventories in the United States, taking a step closer to using the technology to compete better with rivals. In October 2015, the world’s largest retailer applied to U.S. regulators for permission to test drones for home delivery, curbside pickup and checking warehouse inventories as it planned to use drones to fill and deliver online orders. Federal regulators are still considering rules for commercial operation of drones that would be involved in package delivery – viewed as the next frontier for big retailers such as Walmart and Amazon Inc.”

It is hard to believe but 20 or so years ago, North American telecommunications infrastructure was the envy of the world. A couple decades of inept and corrupt regulation and it now lags even developing world countries. The most stark example is in “rural” areas, meaning anywhere outside major population centers. Usually schemes like these are less than effective as they are crafted to ensure maximum taxpayer support with minimal required results.

“Bidders can obtain money by proposing projects meeting requirements in any of four performance tiers. There’s a minimum performance tier that includes speeds of at least 10Mbps downstream and 1Mbps upstream, with at least 150GB of data provided each month. A “baseline” performance tier requires 25Mbps/3Mbps speeds and at least 150GB a month, though the data allotment minimum could rise based on an FCC metric that determines what typical broadband consumers use per month. The next tier up requires 100Mbps/20Mbps with unlimited data. Finally, there is a “Gigabit performance tier” that requires download speeds of at least 1Gbps and upload speeds of at least 500Mbps, with unlimited data.”

18) Meta-lens works in the visible spectrum, sees smaller than a wavelength of light

I’ve read a number of articles about the potential for nanomaterial based lenses in the past few years. The idea is that instead of bending the light using refraction you bend the light using nanostructures. Because the nanostructures are easy to produce you end up with extremely inexpensive, very thin and lightweight lenses. Unfortunately I can’t just how far away from prime time this might be. Nevertheless the fact that lenses have always been made by grinding glass doesn’t mean they always will be.

“”Normal lenses have to be precisely polished by hand,” said Wei Ting Chen, coauthor and a postdoctoral fellow in the Capasso Lab. “Any kind of deviation in the curvature, any error during assembling makes the performance of the lens go way down. Our lens can be produced in a single step—one layer of lithography and you have a high performance lens, with everything where you need it to be.” … “Any good imaging system right now is heavy because the thick lenses have to be stacked on top of each other. No one wants to wear a heavy helmet for a couple of hours,” he said. “This technique reduces weight and volume and shrinks lenses thinner than a sheet of paper. Imagine the possibilities for wearable optics, flexible contact lenses or telescopes in space.””

Apparently firefighters have been using thermal imaging for some time but what makes this approach novel is that it uses augmented reality so superimpose the thermal image over the normal field of view. The video is pretty cool and I can help but wonder if they couldn’t capture another image using a light wavelength which penetrates smoke (i.e. a scanning laser or something) so the firefighters could see right through the smoke.

“Are firefighter’s masks about to get disrupted? Thermal imaging may be about to go mainstream in future masks. There have already been masks with these capabilities revealed, and now, straight out of Switzerland (or, more specifically, the École polytechnique fédérale de Lausanne, better known as EPFL) comes the VIZIR, which will allow firefighters to see thermal imaging with an attached camera.”

This is obviously an early study but interesting for two reasons: not just the promising results but the apparent fact it wasn’t the stem cells themselves which led to the improvement but the presence of the stem cells. This suggests the stem cells changed the local biochemistry and that is what resulted in the improvement, which further implies that understanding and improving that change may lead to more significant results.

“Stanford researchers studying the effect of stem cells injected directly into the brains of stroke patients said Thursday that they were “stunned” by the extent to which the experimental treatment restored motor function in some of the patients. While the research involved only 18 patients and was designed primarily to look at the safety of such a procedure and not its effectiveness, it is creating significant buzz in the neuroscience community because the results appear to contradict a core belief about brain damage — that it is permanent and irreversible.”